Rural Livelihoods in Mon State: Evidence from a Representative Household Survey

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August 3, 2016 - Author: Aung Hein, et al.

Aung Hein, Kyan Htoo, L. Seng Kham, Myat Thida Win, Aye Mya Thinzar, Zaw Min Naing, Mi Win Thida, Ni Lei, Lu Min, Naw Eh Mwee, Zaw Oo, Mateusz Filipski, Ulrike Nischan, Joanna Van Asselt, Brian Holtemeyer, Emily Schmidt, Mekamu Kedir, Adam Kennedy, Xiaobo Zhang, Paul Dorosh, Ellen Payongayong, Ben Belton, and Duncan Boughton. 2016. Rural Livelihoods in Mon State: Evidence from a Representative Household Survey. Feed the Future Innovation Lab for Food Security Policy Research Paper 20A. East Lansing: Michigan State University

EXECUTIVE SUMMARY
The purpose of this report is to provide information and analysis to government, civil society, and donors interested in improving the well-being of the rural population of Mon State. Specifically, the report analyzes the different sources of income for rural households, as well as their socioeconomic characteristics, with a view to identifying potential pathways to improving incomes, especially for poor households, and stimulating inclusive rural growth. The overall picture that emerges is one of an economy heavily dependent on services for local employment and on international migration for income. Like a two-legged stool, such an economy is potentially unstable in the face of external shocks. Diversification of the Mon State economy, including diversification and increased productivity within the agricultural sector, will lessen the relative dependence on external migration remittances and result in more resilient growth in the future.

The analysis presented in this report is based on a sample of 1,632 rural households. The sample households were selected from village communities identified by rural enumeration areas (EAs) in the 2014 population census. All potential EAs were first stratified according to the primary agricultural activity (rice, rubber, orchard, or marine fishing). A total of 140 EAs (a little more than 6% of the sampling frame of rural EAs) were randomly selected, 35 from each of the four activity strata. For each selected EA, 12 households were randomly selected based on a household listing. The sample is designed to be representative of rural households in Mon State as a whole, as well as the major agricultural activities that rural households engage in.

The household questionnaire collected demographic information on all household members, farm and nonfarm income-generating activities, migration, assets (including land), credit, consumption, and shocks. A community survey was also administered in public areas to a group of up to six prominent village figures, such as village leaders, religious leaders, youth group or women’s group representatives, and so on. The community questionnaire focused principally on village wide characteristics such as infrastructure (roads, electricity, waterways, and the like), the availability of services (banking, schooling, and so on), natural disasters, conflict, and so forth

In terms of livelihood strategies for rural households, agriculture, remittances from migrant family members, nonfarm enterprises, and wage labor are the largest sources of income. Wealthier households have more diversified and more remunerative income sources, emphasizing remittances, agricultural production, nonfarm enterprises, and fishing. Although nonfarm enterprises are an important source of earnings at all income levels, poorer households are more likely to depend primarily on income from wage labor.

Almost half of households in the sample had a member in Thailand, where wages are almost three times as high as in Mon State. Offering ample opportunities for unskilled laborers, migration is a common choice for working-age household members of both genders. Remittances sent by family members abroad generate almost a quarter of all income in our sample, at all levels of the income distribution. The earnings of migrants contribute significantly to consumption and asset accumulation, in particular land purchases and house construction. While migration helps bolster the Mon State economy, the absence of workers is being felt acutely in the state, where rising costs of labor are jeopardizing profitability in labor-intensive sectors such as rice and rubber.

Small-scale capture fisheries support the livelihoods of 34% of residents in Mon State’s coastal zone. Many of these people are asset poor and landless, with few other livelihood alternatives. The contribution of small-scale coastal fisheries to the Mon State economy is similar to that of rice or rubber, but the fisheries receive little recognition or attention.

However, the capacity of coastal fisheries to support fisher livelihoods and make a significant contribution to the state economy is under threat from extremely limited management of fisheries for sustainable utilization of fish stocks.

Agriculture is an important component of rural livelihoods, but agriculture is not fulfilling its potential. Half of all households engage in agriculture, and one in five earns wages from agriculture. Households engaging in agriculture earn about half their income from farming and half from nonfarm income sources. Rice and rubber are the most common agricultural enterprises (with 39% and 36% of households participating, respectively), followed by betel leaf, roselle, and green gram (mung beans). Livestock rearing is practiced by 40% of households, usually on a small scale with just one type of animal. Labor scarcity and cost is a major constraint to profitability, given low productivity.

Access to land is a major constraint to livelihood strategies. Three out of every five households have no access to agricultural land, and hence are much more dependent on wage labor for their income. Even among those who do have access to land, the distribution is very unequal. The top 20% of households own 56% of the agricultural land, compared with just 2% owned by the bottom 20% of households. Only slightly more than one-third of households owning agricultural land have an official land title document. One result of unequal land distribution is that a high proportion of farmers, 43% in the case of rice, hire permanent workers (or sharecroppers in the case of rubber). Most permanent workers are of local origin.

The area planted in rubber has increased rapidly in recent years, and the majority of trees have yet to reach productive age. Mature trees are harvested with average yields of 900 pounds per acre, compared with more than 1,400 pounds per acre in Thailand and more than 1,500 pounds in Vietnam. Limited fertilizer use, unimproved varieties, and inadequately skilled labor contribute to low yields. The profitability of rubber is further undermined due to low prices associated with poor quality (a high level of impurities and moisture) and inefficient marketing channels (multiple handlers). The potential for improvement is demonstrated by the top 20% of rubber income earners, who achieve average yields of almost 1,700 pounds per acre and three times the profit per acre of the average rubber farmer.

The primary reasons for the low performance of rice and annual crops are (1) the small percentage of area cultivated in the winter season under irrigation (only one acre out of eight is cultivated in the winter season, and only 3% of rice farmers practice double cropping), (2) limited use of improved technologies, and (3) preharvest losses due to flooding and pests.

Low use of improved technology is a constraint to the performance of agriculture. Lack of access to irrigation for winter-season production limits agricultural activity largely to the monsoon season. Median rice yields are only 50 baskets (a little more than a ton0F0F 1 ) per acre. Despite labor shortages, only one in four rice-growing households owns a power tiller or a tractor. Even though rental markets allow almost 60% of rice farmers to use mechanized land preparation, there is considerable scope to increase access to mechanization for timely operations. Reflecting the predominance of monsoon rice cultivation, the most popular rice varieties are traditional long-stemmed varieties that are resistant to flooding and fetch a high market price. Fertilizer use is low and chemical-based weed and pest management negligible. Improvements in crop management could greatly increase productivity and profitability. The top 20% of rice growers in terms of profitability have yields double those of the average rice farmer but with similar costs per acre.

Limited diversification of agricultural production also constrains the contribution of agriculture to household incomes. Mon State is suitable for a wide variety of horticultural production (vegetables and fruit trees), yet only one in five agricultural households engages in it. For those that do, incomes per acre are much higher than for rice or rubber.

Limited commercialization of agricultural products is both a reflection of and a contributing factor to low productivity at the farm level. Only half of rice farmers achieve a marketable surplus, and those who do have a surplus sell it shortly after harvest. A much higher proportion of other annual crops are sold. Most rubber is destined for low-quality use with multiple handling between farm and processor rather than coordinated supply chain management for high-quality manufacturing.

In conclusion, the agriculture and nonfarm sectors could make much larger contributions to rural incomes in Mon State in the future than they do today. Realizing this potential would diversify the sources of income for the state economy, providing expanded income sources for families without migrants as well as resident members of migrants’ families. Diversification of Mon State’s agriculture requires expanded access to irrigation for more diversified, high-value production, as well as increases in the productivity and quality of its traditional food staple and cash crops (rice and rubber). Improved access to and quality of market-oriented farm advisory services, initially publicly financed, is a necessary investment to support this transformation.

But diversification into high-value activities needs to occur in the nonfarm sector as well as in agriculture. Besides improved energy and road infrastructure, for Mon State to create higher-wage employment in the off-farm sector, the current low levels of educational attainment need to improve dramatically. Among five dimensions of well-being (food consumption, housing, clothing, healthcare, and education), households are least satisfied with the adequacy of education. Because improvements in education take time and will come too late for many school leavers over the coming decade, attention should also be given to literacy and vocational skills training opportunities, such as rubber tapping, construction, carpentry, and mechanical and electrical repair.

International migration, especially to Thailand, will continue to be an important source of income (directly and through consumption linkages) for many years, quite possibly decades, to come. Efforts should be made to improve migrant safety and welfare through insurance, language training, and education on Thai law and worker rights.

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Tags: c1/c2, fsp research paper, household income and livelihoods, myanmar


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